Digital Technologies for Banking
Digital technology is rapidly changing the way people use financial services. Some banks no longer need outlets in the real world to offer services to clients. Smartphone apps are increasingly used for transactions instead of cash and plastic cards. Fingerprints and voiceprints can be used to confirm the client’s identity.
Whether these global trends have reached Belarus and how our daily lives may change in the next few years is discussed in an Economy of Belarus Magazine interview with Head of the Central Office for Payment System and Digital Technologies of the National Bank of the Republic of Belarus (NBRB) Alexander SOTNIKOV.
According to Alexander Sotnikov, the first online-only bank may be established in Belarus in 2018. The conditions are already in place, and there will be enough clients for at least one bank of this kind. Now it is up to bankers to gather up the courage for such a project.
The expert noted that the interbank client identification system, which was commissioned in Belarus on 1 October, has fixed all the problems that prevented Belarusian banks from offering their services solely in the virtual environment. As far as potential clients are concerned, quite many Belarusians opt for remote banking services. “I think the number of such clients is sufficient for at least one virtual bank,” noted Alexander Sotnikov. “Now it is up to the banks to do this. They have to be morally and financially ready to implement the project.”
By the way, there are quite many online-only banks abroad. The examples of Tinkoff Bank in Russia and mbank in Poland come to mind. All their services are available online without face-toface interaction between clients and bank personnel. All the data is stored in the cloud while technological processes are outsourced. In Belarus IT companies and their employees could become clients of an onlineonly bank. Later on all smartphone users or several millions of people could join them.
Using smartphones for daily transactions is another promising trend. In Belarus it can become reality within the next 10-15 years, Alexander Sotnikov believes. However, the question of whether the transition will make plastic cards and cash obsolete is open to debate.
“I believe that everything is in place to make smartphone payments part of the basic banking services. However, I doubt that plastic cards will disappear. We’ve been saying for a long time that cash is a thing of the past yet people continue using it,” the representative of the country’s central bank said.
Instead of “killing off ” plastic cards, cash or some other payment instruments it is necessary to enable comfortable conditions for end users, the expert underlined.
“It is simpler, more understandable and convenient for me and many other people to pay with smartphones instead of plastic cards,” Alexander Sotnikov remarked. “At least because smartphone technologies are developing faster than plastic card services. I may appear cliched but I will never leave my smartphone at home while I can leave my plastic card.”
Yet before smartphoneenabled payments are available on a mass scale, it is necessary to put the relevant infrastructure in place and tune it properly in addition to offering the necessary level of security for smartphoneenabled transactions, the NBRB representative stressed.
As far as the security of such transactions is concerned, the future belongs to integrated biometric identification, the expert is convinced. A number of biometric technologies will be used
Instead of “killing off” plastic cards, cash or some other payment instruments, it is necessary to enable comfortable conditions for end users